The Advantages of a Dispute Resolution Board

One of the programs that has developed from the growing evolution of alternative dispute resolution is that of Dispute Resolution Boards.

A Dispute Resolution Board (DRB) is a panel of independent, neutral professionals typically used in large construction projects to:

• Encourage dispute avoidance and resolution.
• Assist in the resolution of disputes that may arise during the project.

An often-used approach for creating a Dispute Resolution Board is for an Owner and General Contractor to each choose a participant for the panel and then for those two panelists to select a third member. For smaller projects, to avoid excessive costs, the Owner and General Contractor will simply jointly select a third-party neutral to manage the dispute process.

The decision to rely on a DRB, whether a single individual or a panel, is typically successful one, because that third-party decision maker is committed to being involved in the project from the beginning to the end. Since this third party is an essential participant in the project, DRB members are invested in the project from the beginning and therefore are acquainted with the project from the start. As disputes arise, there is no time lost having to familiarize a third party with the facts of the project. The DRB can get to the heart of the dispute quickly. 

As a neutral, independent participant, a DRB panelist can provide help to impacted parties so they can reach a resolution of any issues that cannot otherwise be easily settled during the project. This reliance on an impartial person or panel of professionals to manage any problem-solving during a project can help to move that project forward when needed.

The use of DRBs can hopefully create a less adversarial environment on the related project. When viewed in a preventative light, DRBs have helped project participants avoid the need for litigation. DRBs allow all parties in the project to participate in the resolution process. No alienation of the subcontractors, architects or suppliers occurs. All parties are vested with a global interest in creating a successful project without the initiation of disputes. Therefore, the decision to utilize a DRB on a project can help avoid or minimize disputes, prevent any disputes that do arise from lingering on a project, and ultimately assist in avoiding project delays caused by disputes as well as the cost impact those disputes have on the project.

Oftentimes a DRB can assist with “real-time” resolutions of matters as they arise. DRB’s can be vested by agreement with the power to make recommendations on how to resolve disputes or they can be appointed by contract with the power to make binding decisions. Typically, most DRB’s are contractually provided with the right to make non-binding, admissible recommendations with an understanding that, if not resolved, the dispute may then be carried over, with or without counsel, to a later binding process, whether that is through arbitration or the courts.